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What is MSME Registration
MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories can apply for MSME Registration. MSME Registration that falls under the MSMED Act facilitates promotion and development of enterprises and improves its functioning.
Any type of enterprise can apply for SME registration. These includes proprietorship enterprises, enterprises managed by Hindu undivided family, enterprises run by association of individuals, co-operative societies, partnership firms and enterprises managed by companies or undertakings etc. After registration, an enterprise becomes eligible to get the benefits under the MSMED Act.
Stages in MSME Registration
There are two stages of registration-provincial and permanent (final). An enterprise is granted provincial registration when it is at a pre-investment stage. After getting provincially registered, an enterprise can apply for permanent registration just before launching its production facilities. However, an enterprise that is already functioning need not have to apply for provincial registration as it is eligible to apply for permanent registration. Any entrepreneur having valid Aadhaar Number can apply for MSME Registration Online.
Enterprises falling under the three categories (micro, small and medium) are further categorized into two types of industries- manufacturing industry and service industry. The status of an enterprise under the MSMED Act is determined according to the investment slab under which an enterprise falls
Classification Of MSME Registration
To register under MSME, an industry owner should know how and what category to classify his company into. Basically the criteria set by the Government for registration under the MSME act can be broadly classified as follows:
- Micro industries– The investment does not exceed 25 lakh for companies in the manufacturing sectors and 10 lakh for the service sector.
- Small industries– The investment does not exceed 5 crore for companies in the manufacturing sectors and 2 crore for the service sector.
- Medium industries– The investment does not exceed 10 crore for companies in the manufacturing sectors and 5 crore for the service sector
Advantages of MSME Registration
Benefits from Banks
A corpus fund of 10000 crores has been introduced under MUDRA scheme where small business can borrow working capital loans at low interest rate.
Various tax benefits are there for MSME such as reduced tax of 25% from the existing 30% up to turnover of Rs 50 crore
MSME’s are extended loan up to Rs 1 crore wherein the central government takes the guarantee of the borrower, which can be very useful to diversify the business
From time to time the central government roll out various subsidies to promote MSME’s. Even SIDBI offers loans at subsidized rates to MSME industries.
Cost Of MSME Registration
Procedure For MSME Registration
Preparation(1-2 Working Day)
- Our experts will gather the required documents & prepare your MSME application
Processing(5-7 Working Day)
- The application will be processed by MSME office which in turn may request for further information.
Completion(1 Working Day)
- Once the application gets approved,our team shall email as well as courier you the MSME certificate
FAQ’s About MSME Registration
How is the value of plant & machinery computed?
In accordance with the M/o MSME (earlier M/o SSI) Notification no. S.O. 1642(E) dtd.29-09-2006 while computing the value of Plant and Machinery, the original Value of the machinery is to be taken in to account. The components, to be excluded while computing the value of Plant and Machinery, are detailed in the said notification
What are the main contents of the “Promotional Package” for Micro, Small & Medium Enterprises of Ministry of MSME?
PROMOTION OF MICRO AND SMALL ENTERPRISES” announced by Shri Mahabir Prasad, Minister of Small Scale Industries and Agro And Rural Industries In Lok Sabha on 27 February 2007 and on 2nd March 2007 in Rajay Sabha, provides for Credit Support, Fiscal Support, Support for Cluster Based Development ,Technologies and Quality Up gradation Support,Marketing Support, Supports for Entrepreneurial and Managerial Development Empowerment of Women owned Enterprises Strengthening of Prime Minister’s Rozgar Yojana (PMRY), Strengthening of data base for MSME sector
How many items are reserved for manufacture in SSI Sector?
As on date, 20 items are reserved for exclusive manufacture in the Small Scale Sector.
What are Micro, Small and Medium Enterprises (MSME) and how MSME (Manufacturing) are different from MSME (Services)?
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
- Manufacturing Enterprises: The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
- Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.
What is the support available for collateral free borrowing?
The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals/ third party guarantees. The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.
The Credit Guarantee scheme (CGS) seeks to reassure the lender that, in the event of an MSE unit, which availed collateral- free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the outstanding amount in default.
The CGTMSE would provide cover for credit facility up to Rs. 100 lakh which have been extended by lending institutions without any collateral security and /or third party guarantees. A guarantee and annual service fee is charged by the CGTMSE to avail of the guarantee cover. Presently the guarantee fee and annual service charges are to be borne by the borrower. For further details please visit www.dcmsme.gov.in.